Thumbtack’s business model seems to be:
Scraping -> Database -> Client Lead -> Referral fees
While they weren’t the first to notice that people have “bought and sold local services in the same ways for the last 50 years,” as Swanson puts it, their twist was to develop software, instead of using salespeople, to scour the Web for service professionals and invite them to join Thumbtack’s database. From there, the workers are vetted by the company’s 30 U.S. employees and some 200 full-time contractors based in the Philippines.
Thumbtack says it gets about 2 million monthly visitors who request referrals and provide their Zip Code. It sends each request to relevant workers in its system, who pay up to $15 each time to have their names appear in the particular customer’s list of referrals. The company likens the fees to Google’s AdWords, which sells ad space to the right of search results for desired words and phrases. (Yelp is ad-supported; Angie’s List charges users for subscriptions.)
If its database doesn’t include a qualified service to meet the customer’s needs, Thumbtack’s software crawls the Web to find one. “The hard part is finding the right service professional who is trusted and is available at the right time and at the right price,” says Bryan Schreier, a Sequoia Capital partner who is leading the investment. “That is the art of Thumbtack.”