Crushing the Pivot: Lessons Learned from a Product Reboot with TaskRabbit (Video + Transcript)


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Join Leah Busque, TaskRabbit founder and Fuel Capital general partner as she talks about crushing the pivot, doing a complete product reboot and the lessons learned along the way. Want to see more content like this? Join us at SaaStr Annual 2020.   Leah Busque, TaskRabbit founder and Fuel Capital general partner FULL TRANSCRIPT BELOW Hello, everyone. How is it going? Wow. More energy, people. It’s noon, right? Oh my, God. There’s a desk right here. Has everyone eaten? Have you had lunch? Oh, God. They put me right before lunch. I’m sorry about that. We’ll get going, and hopefully you can get a nice meal and get energized after this. I’m going to talk to you today about what I call crushing the pivot. How many of you are familiar with TaskRabbit, have you used TaskRabbit? All right, a good amount of you. What you need to know about
story is that I founded the company back in 2008. I founded it at a time where it was crazy to think you would jump into a stranger’s car to get a ride, let alone invite a stranger into your home to do small jobs and tasks for you. Over the course of the next 10 years, the landscape in the market dramatically shifted, dramatically changed. The consumer literally changed overnight just right under our fingertips. The challenge with that is you found a company, you start building a company, you raise money for a company, you hire a team to build the product for a certain type of company, and then the whole consumer changes and you have to adjust. In 2008, I founded TaskRabbit. In 2014, we threw away the entire code base and started from scratch. This was a terrifying thing to take on. Honestly, as I look back, if I had known how hard it was going to be, I’m not sure I would have done it. Let me just share with you some lessons that I learned along the way and hopefully if you’re thinking about products you’re bringing to market and how the consumer might change as those products hit market, hopefully you can take some of these lessons learned as well and apply them to whatever you’re building. That’s me. TaskRabbit I ran for almost a decade, and then we sold it to Ikea, the global furniture brand in 2017, and so now I spend my full-time job as an investor looking at early stage tech companies. I invest across consumer, B2B SaaS companies, and then also dev tools and infrastructure companies as well. It’s been really fun to be on the investor side. It’s given me a new perspective, especially as I look back on the last 10 years about decisions I was making when I was the CEO of TaskRabbit and maybe what my investors were thinking at the same time, particularly as we went through all these product changes. First lesson learned, I truly believe that any product you are bringing to market, you need to have what I call BHAGs, big, hairy, audacious goals. BHAGs are goals that are embarrassing to share with people. They’re so big. They’re so crazy. You want to hide them in the closet and just hide them from people because if you shared with them what you were actually thinking, they might think that you’re insane. I’ve clicked this clicker six times and nothing is happening. If anyone has some tips, okay, great. I like to think about BHAGs as the children’s story Where the Wild Things Are. I have a five-year-old and a two-year-old, so I might be a little bias, but we read this book a lot. I think about BHAGs as these big, hairy monsters. They’re just stomping around the forest, and they’re taking no prisoners, and they’re scary, and they have big eyes. These are the types of goals that I feel like as a founder, you really have to have in your head. I’ll tell you a story at TaskRabbit. The clicker worked. We’re back in 2012. This is prior to the massive product pivot. I challenged the team to sit down in a conference room, get out a whiteboard and have big, hairy, audacious goals. We did this whole Post-it note exercise where everyone took five minutes and they wrote down the craziest ideas that they could on separate Post-it notes. We put them up on the whiteboard and then we all discussed them. I remember the team was probably about 20, 25 people at the time, and someone wrote on the Post-it note, “When President Obama posts a task on TaskRabbit, we’ll know we would’ve made it.” This was back in, yeah, it was probably about 2012. Everyone laughed. Everyone thought it was so hilarious, so funny. Wouldn’t that be so funny if the president posted a task? We had this crazy goal. Fast forward three years later, we actually were invited to the White House to present to President Obama and his team about how TaskRabbit and the technology platform could be used to connect people in disaster recovery and relief situations. We had built this technology where there are masses of networks of people, all location-based, and there were certain needs. We need sandbags filled. We need blood. We need donations delivered. They were able to utilize our technology in times of disaster relief and disaster recovery. I share this story because I think that having those big, hairy, audacious goals is incredibly important, but how do you go from having the crazy goal of President Obama posting a task on TaskRabbit to actually making it happen? As a founder in the early days, you really have to have that north star vision, but then also figure out what are the baby steps that are going to get me to this crazy, crazy goal? Particularly as the founder and CEO, it’s your job to balance those two things in your mind at all times. Keep the team executing. Keep the team focused on those day-to-day little tasks, but then also make sure that the whole team is driving towards that massive, massive goal. N In the case of this product pivot that we did when we threw away the whole code base in 2014 and started from scratch, what I learned here was that we had the vision for TaskRabbit from the very beginning of changing the way people work, of disrupting the labor markets, of giving people a flexible way of making money and utilizing their skills on a daily basis. That was really the big, hairy, audacious goal. The little steps we took to get there had to also change and iterate in real time. As the CEO, as the founder, as a product person, which is my background, I really could’ve done a better job at maintaining that focus on those little baby steps and making sure they not only led up to the right goal, which was disrupting the labor force and creating flexible job opportunities for people, but also that they were timely, that they were in the market at the right time, that the consumer was actually engaging with the product in the way that was going to lead us to the goal. That brings me to the second lesson, which is I truly believe that everyone, everyone on your team, everyone that you come to pass in life, whether you’re at a big company or a small company or just working on your own, everyone has an entrepreneur inside of them. The other big lesson I learned is when you’re engaging and inspiring a team and creating these big, hairy, audacious goals, you also want to be able to tap into that entrepreneurial spirit, particularly when you’re innovating. You’re creating something that no one has ever done before. If your big, hairy, audacious goal is big enough, chances are they haven’t done it before. Here are a few things that I learned along the way. One is done is better than perfect. It’s a lot of people’s inclination. Certainly my inclination as a founder to strive for perfection. We have been groomed our entire lives to be perfect, to get straight A’s, to compete, to win time after time after time. You have to remember that the people that you’re working with, the team that you’re engaging, they all been groomed the same way. You’re probably working with very ambitious, very capable people. I’ve seen the value in just making sure that as soon as something is done, you can bring it to market and immediately get feedback, and that is so much better than holding something internally, holding it close and waiting for it to be perfect. The punchline is it’s never going to be perfect because the market is always changing. The consumer is always changing. When you’re building a product for the consumer, you can’t get it out fast enough. You wait a week. You wait a month. You wait a day to do that release. The customer has completely changed beneath you. You’re going to engage a different customer depending on how long you wait to bring something to market. We got into a very good entrepreneurial working style, which helped us I think tackle, particularly after the massive product pivot, how to just be more iterative and how to work entrepreneurially across the team. The steps that we took were: develop tests, develop tests that we thought we could run and implement in a very short amount of time; measure very closely the outcomes of those tests; iterate and tweak them and then improve from there. I’ll give you an example. When we launched the new product, we had some questions about the workflow, the actual signup workflow. We had this debate internally about whether or not we should be asking for credit card information before a user is fully signed up or should we just wait until after? It may seem like a simple decision, but there is a lot of complexity in a two-sided marketplace where people are expecting to get paid. We wanted to make sure that these taskers that were doing work were going to get paid, but we also wanted to make sure that the clients that were signing up that their credit cards checked out and their identities were verified. If we didn’t do that in the right amount of time, before they posted their first task, then we as the company would be taking on a lot of liability and risk to ensure that we could underwrite and pay out those taskers if the credit cards fail. We also wanted to make the signup flow and get to posting a task as fast as possible and make it as quick and easy as possible. We went through this test, measure, iterate and improve process. What we did actually is we separated out the user base, and we tested both options with two clean cohorts of users and then compare them against each other. We did this over the course of a couple of weeks. We looked at any losses that we might have incurred by not having the credit card information verified upfront versus afterwards and then compared how many more users did we get to sign up? How many more tasks did we get posted? On average, was that a better way to go? That was great. We used this this iterative testing across many other examples in the product. There is one problem though with this, and that really leads me to the reason why we decided to completely throw away the code base in 2014 and start from scratch. That is when you’re iterating and improving across a single peak, a single mountain, a single workflow, a single product, you might be missing an entirely new mountain range that is much bigger, that is much wider, that actually gets you closer to that big, hairy, audacious goal faster than if you just focused on that single mountain. It was actually late 2012, early 2013 where we looked at the growth. We looked at the numbers. The marketplace was doing well. It was healthy. We were growing, but there was still a lot of friction in the product. Back in those days, I was really inspired by the eBay model of a marketplace where it was a bidding auction approach. In the early days of TaskRabbit, say you needed your dry cleaning picked up. You would go on TaskRabbit. You would post a job looking for a tasker to pick up your dry cleaning, and taskers would bid on your job. Hey, I’ll do it for $10. I’ll do it for $8. I’ll do it for $15. You would get to choose who you wanted to work with based on their profiles, based on the pricing, based on their availability. What seems so obvious now as I describe that is there was so much friction in the marketplace. It took so much time to figure out who is going to pick up your dry cleaning that we were losing a lot of business, that we just were leaving on the table. There was such a massive opportunity to streamline the workflows to make an instant booking platform, which again seems so obvious today, but it wasn’t obvious 10 years ago because the consumer mindset had shifted so greatly. We looked at the numbers, and in 2012 early 2013 when we said, listen. We’re growing, but we’re not growing at the rate and scale we think we should be. We’re not growing at the rate and scale that frankly makes sense for a venture-backed company. I understand this more now as an investor, those growth metrics and those scale metrics that an investor looks for. We always knew that this market opportunity was so large. Disrupting the way people worked, providing flexible work, that’s a massive market. Why aren’t we unlocking the full potential that we would have in this industry? That was another moment where I really challenged the team to think, listen, we’ve been optimizing on this one mountain, and we have this auction bidding-based approach. Is there another mountain range that we should leap to? Should we boldly leap to a new peak? The resounding answer was yes. We were missing an opportunity. We were missing the mark on the consumer. We were missing the right product and market. At that time, we were live in I believe 20 cities in the US. We had a really interesting opportunity to launch London, to launch TaskRabbit internationally, but we hadn’t done it yet. We debated as a team. I debated with my board as well. If we’re going to test a new product, and the thought was let’s make it mobile first, let’s make it a straight booking platform, let’s completely redo and re-envision how the consumer would want to engage in this service marketplace. We thought about, well, what if we just take a city? Why don’t we take a new city in the US? Why don’t we take Atlanta, a smaller market and just test it there? Because we had built so much brand equity already in the US, we’re open in 20 cities. We had been on the Today Show and Good Morning America. We felt like people are going to have a certain expectation of how this works. Could we really limit it to one city, in one geography? That seemed really complicated. We thought about London and we thought, what if we jumped to a whole new country? The team and I thought this was a great idea. Investors were not as onboard in the beginning. They were like, well, you really need to get this product market fit right, and we need to be growing faster here in the US. We really need to focus here on the US market. The team and I had just a really instinctual feeling that if we could open a brand new market where no one had heard of us before, no one had heard of us in London or in the UK or overseas, that would give us the opportunity to get this unbiased, unfiltered feedback and opinion and then clearly measure. We have this test, this theory that the new country would unlock new potential for us with a new product. Being able to measure if that was right was really important. I am so glad that we decided to open London. We opened London with the brand new code base. We started from scratch. We built a mobile product only. This is the first time in 2014 that we required all of our taskers to have either an iOS or Android device, which again today seems so straightforward but it wasn’t in 2014, and we created this instant booking system. We had to change the entire operations of the company to support the new product. It wasn’t just about changing the code base, but it was about retraining. Actually in London, we just had to bring on a whole new group of taskers and create a new training program to get them up and running. Instead of the auction bidding based model, we now asked all of our taskers to put in their availability upfront, change their own schedules on demand. We asked them to draw work areas or areas that they wanted to be sent jobs. We asked them to register for up to 40 different categories or skillsets that they wanted to find work in, and then we asked them to set their prices, hourly rates for each one of those categories. That’s a lot of information to onboard up front for a tasker, particularly in the old model where it was auction bidding based, it was really left on the taskers to pick up whatever jobs they wanted and set the prices they wanted. We needed all of this information upfront so that we could do instant booking and instant matching. It completely took on a different set of operations that we needed to support the marketplace and the product. I’m so glad that we launched in London because we launched London and we immediately saw a lift, actually doubling in core metrics, like repeat usage, like the number of tasks posted on a daily basis, like the engagement from our tasker community even and how many jobs that they were completing. All of these core metrics doubled. We said, okay, great. This is a great sign. How do we roll this new customer experience back to the United States market? This is where it became complicated. We had millions of customers, and we had 50,000 taskers on the platform in the US at the time. Basically, overnight, we completely shifted the code base to this new model, the streamlined booking based model. We removed the auction in the bidding based model, and then we had to retrain 50,000 taskers on getting their information up front so that we could do the matching and the booking instantly. This was the massive undertaking. This was, as I look back, would I do this again? God, I hope so because it completely changed the trajectory of the company, but it was tough times. When we launched the US market, we had spent probably two to three months up front doing road shows, traveling city by city by city and explaining the new product, demoing the new product. We actually took our top tasker in London, and we brought her to every US market to do training programs with the current taskers and get them retrained on this new model. We felt like we did everything we could to communicate the new changes, to get people on board, to get their feedback, to make more tweaks before we launched in the US, but then we actually had to launch and overnight to migrate a million customers and 50,000 taskers to a new database, to a new code base into a new way of operating, there was just no way to prepare for that. The next morning, we woke up, and we had a lot of angry customers, a lot of angry customers. We had clients that were mad because they loved the auction bidding based model. They liked having the control on who they worked with and how much they paid. We had taskers that even though they were saving 400% of their time by not having to bid on jobs, by just getting matched with jobs, they were mad because they didn’t have as much control as they did before with the auction bidding based platform. A big learning that I took away from that is change is hard. Change is hard for people. It doesn’t matter how well you prepare them. It was just a tough transition. At the same time that we had this, it was a smaller customer base of clients and taskers, but they were very vocal about how mad they were about the changes. We also had net promoter score, which you might be familiar with, measuring just the customer happiness on the marketplace. It went from we were probably in the 60s or 70s, it went down to negative. Everyone was just really upset about the new product and the new changes. Oddly enough, at the same time when we looked at the new cohorts of customers, when we looked at the new clients we were acquiring, when we looked at the new taskers that we were training, their NPS was really high. Their metrics and their repeat usage was double, if not more than what it was in London. As we spliced the data and we really dug deep into the performance and the health of the marketplace, we realized that, you know what? Maybe a lot of these customers that had been with us for a long time that just really love this auction bidding based platform, maybe they were the wrong customers. Maybe they were the ones that weren’t going to take us into the future. Maybe they were the ones that weren’t actually going to drive the growth so that we could hit those big, hairy, audacious goals. We had to be okay. We had to get comfortable in firing those customers and not trying to reengage them and not trying to sell them and just realizing that we needed to go out and recruit and train and acquire a whole new cohort of people in this community, in this marketplace. I keep saying I’m so glad we launched London because London was this bright spot. No one in London had heard of us before. No one had used the old product before, and so it was something that we could point to, something I could point my board to and say, and the team like, don’t panic. I realize NPS is at an all time low. I realize that we have angry customers calling but look at London, look how well London has done, look how fast it has grown. Because we were able to point to those hard numbers, those hard metrics and that revenue, we stayed the course. It took three to four months but after three to four months, you know what? Enough customers had turned over and new customers had been acquired, and the growth metrics and the NPS scores and everything picked up, and it put the company on a completely different trajectory, more of a growth scale, more of a venture scale business. That is a story I haven’t told too often. The last lesson I learned with this whole product change that we did was something that I think is a little bit more culturally oriented and really speaks to I think how we recruited and engaged the team and how they were able to work through this really, really tough transition that was holding on to a rollercoaster ride and riding up and down and not really sure if you’re going to be thrown off or not. The lesson is winners don’t win. They succeed. Winning is defined as, to me, putting points on the board to winning a game, to driving revenue, to be enabled to hit those metrics, those milestones and those numbers that you want to win. I define success differently. I think success is the ultimate goal. I think that success can include winning. It can include results and numbers, but it also includes values. Did you operate in a sustainable way? Did you operate with values? Did you operate in a way that you’re proud of? Are you changing the world? What is the impact you’re having? Did you as a team really come together to drive that change, to meet your mission, to meet your vision, to meet those values? Winning is not enough. I think ultimately driving for success is what is actually important. I’ll tell you a quick story, which is about a company that you have probably heard of as a big company. This happened a couple of years ago. It was a bank. I think it illustrates this lesson, which is the higher-ups at the bank, the leaders there said, we want to have really aggressive goals, and we want to measure them quarterly. These are sales goals. We want to increase sales by 20% this quarter and just do whatever it takes to win. Do whatever it takes to hit those numbers. The teams underlying said, okay, well we’re going to go out and we’re going to make more sales and we’re going to engage new customers. What actually happened is halfway through the quarter, they weren’t going to make their numbers. They weren’t going to increase by 20%. What did they do? Well, they panicked and they said, well, can we charge more? Can we bill more? Can we bill for more hours? Can we game the system so we actually hit the revenue? It wasn’t actually what was best for the customer. It wasn’t right for the consumer. This type of growth is not sustainable because they hit their numbers for the quarter. They won for that quarter. The leadership on the team was incredibly happy and gave everyone a pat on the back, but within a couple of quarters of this, within a year, it wasn’t sustainable growth. Customers fell off. Customers were angry. Customers realized what was going on wasn’t in their best interest. They didn’t operate with their values in mind. They didn’t actually have the impact that they intended to, and that in the end is winning without success. I knew at TaskRabbit from very early on that we would be successful. I did not always know that we were going to win in the space, and that frankly is still up for debate. There’s a lot of competition in this service space, but I knew we’d be successful. We were only open in two markets, Boston and San Francisco. There was this woman in Boston, and she went onto this TaskRabbit site, early days, auction bidding base model and all. She said, I have a son in San Francisco and unfortunately, he is undergoing chemotherapy treatment. He’s 20 years old, and he’s being treated for cancer, and he has to go in for these infusions every week. I can’t be out there to be with him every week, all the time, but I would love to find someone that could go visit him every time he goes into the hospital, bring him a healthy meal, a cozy blanket, sit with him for 30 minutes, see how he’s doing, and then I want you to call me afterwards and give me the update. The tasker that picked up the job in San Francisco was actually another mom. The bond that these two moms formed across the country was just pretty incredible. That was the moment that I realized that what we had built goes far beyond just small jobs, tasks and errands, that we’re actually redefining who your community is, who you can rely on, who your neighbors are. It was at that moment that I realized we were going to build something that was successful, and it actually went beyond just winning in this service marketplace game, that we were going to make an impact. We were going to act with values, and we had a greater mission to deliver. I strongly believe and take away that you can succeed without winning, and you can win but not succeed. To inspire your team to keep those core values in mind, I think, really creates a culture that has high impact, that operates well, that is sustainable, and that ultimately will achieve those big, hairy, audacious goals that you set out. Thank you. The post Crushing the Pivot: Lessons Learned from a Product Reboot with TaskRabbit (Video + Transcript) appeared first on SaaStr.

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