Fri, 16 February 2018
186: TaskRabbit Was Ahead of its Time, But Leah Busque’s Vision and Persistence Made it a Game-Changer
No Task Too Big
Leah Busque launched TaskRabbit and became a pioneer in the sharing economy. Now she wants to empower other founders as she transitions to venture capital.
Picture this: You’re sitting at home on a February night in Boston, where winter temperatures dip well below freezing, and it’s snowing outside—not exactly a good time to find out your hundred-pound Labrador retriever is out of dog food.
So what do you do? Do you don your boots and trek through the snow in pursuit of kibble? Do you ask your spouse to do it? To a 28-year-old Leah Busque, the solution should have been simple: Why not hire someone in the area to run that errand for you?
“[My husband and I] were certain that there was someone in our neighborhood that'd be willing to help us out,” Busque recalls. “Maybe even someone at the store at that very moment, and it was just a matter of connecting with them.”
After some geeky brainstorming with her husband, Busque grabbed her iPhone—it had come out a few months before—and bought the first domain that came to mind: RunMyErrand.com. Four months after that, she left her job as a software engineer at IBM and locked herself in her house for 10 weeks to build the first version of the site, all because a service she wanted didn’t yet exist. Thanks to Busque’s creativity and persistence, now it does—TaskRabbit.
Think Big, Start Small: From Back Bay to the Bay Area
In September 2008, RunMyErrand launched in the Boston neighborhood of Charlestown, where Busque was living at the time.
“I was very targeted,” she says. “[I] really wanted to focus on one geography and create a peer-to-peer-network in that geography that was liquid, that would have high supply and high demand … and from there it just really started to snowball.”
Word traveled fast. People in Charlestown started telling those in Beacon Hill about this new service that let you hire locals to run your errands. Word traveled from Beacon Hill to the residents of Back Bay and Cambridge. Soon enough, Busque was recruiting Taskers from all over the city of Boston.
By the summer of 2009, Busque was invited to participate in an incubator program run by Facebook, leading her to change the name from RunMyErrand to TaskRabbit before launching in her second market—San Francisco.
A Pioneer in the Peer-to-Peer Sharing Economy
Here’s how TaskRabbit works:
First, you post a task on the platform (mobile or web), such as, “I need help mounting a 32-inch flat screen TV on my wall.” Next, you get matched with vetted Taskers in your area, and you can view their ratings and hourly rates. Then, your chosen Tasker shows up, completes the task, and gets paid securely via the app. A simple enough idea for any smartphone user today, but you have to remember that TaskRabbit launched in 2008; most people were still rocking flip phones, and the term “sharing economy” hadn’t yet made it into the consumer vernacular.
“These technologies were so new and so emerging, it wasn't an obvious thing to be able to utilize your mobile device to connect with people in real time,” Busque explains.
“Certainly, no one was going to jump into a stranger's car off the street and grab a ride with Lyft or with Uber. And so the consumer mindset was completely different. Trust was a big barrier. Letting a stranger into your home to hang shelves, or hang curtains, or clean your house—these were all very big decisions that the consumer was making.”
It’s been almost a decade since TaskRabbit’s inception, and the company’s come a long way from that neighborhood in Boston.
The service has expanded to about 40 markets (including London), raised more than $50 million in venture funding, and last year was acquired by Swedish furniture giant Ikea.
According to Busque, TaskRabbit gets more than 15,000 applications every month from people who want to be Taskers. And on the buyer side of that marketplace, people have hired Taskers to do errands as varied as waiting in line at a store, rushing a passport to the airport, and even retrieving keys from the bottom of a lake.
Knowing When to Quit, and When to Keep Going
As an entrepreneur, it’s important to know when to quit. Failing to realize an idea is a dud can lead to overspending and wasted time. So we had to ask Busque, especially given the novelty of the idea when it first launched: Did she ever feel like giving up?
“I’m not someone who gives up,” Busque says. “I’m not someone who quits.”
Given the dismal economy during TaskRabbit’s early days, one would have understood if she had. When Busque launched the first version of the site in September 2008, subprime lending had tanked the housing market and the stock market was crashing, ushering in the Great Recession—not exactly the best time to be quitting a steady job, or starting a business, or seeking investors. But still, Busque pressed on, choosing to bootstrap her startup for almost a year.
“We had a mortgage on our house and we had bills to pay,” Busque recalls. “We basically did the math and thought, 'We've got about six months where I don't need to work. I don't need to take a salary to kinda make ends meet.'”
When six months came and went and TaskRabbit still didn’t have an investor, it must have been difficult not to close up shop right then and there.
“We were so close though; I felt like I was on the brink of something every day. I thought, ‘I just need 24 more hours, 48 more hours, one more week.’ And so every day was a question [of], ‘Should we keep going? Should we call it?’”
Thankfully, Busque didn’t call it quits. In December 2008, three months after she had missed her self-imposed deadline to raise funding, Busque closed her first angel round of $150,000. That funding was enough to carry her fledgling business through to the end of 2009, when she raised a seed round of $1 million.
As an entrepreneur, it’s just as important to know when to keep going as it is to know when to quit.
Before You Automate, Do it Manually
As Y Combinator co-founder Paul Graham says, “Do things that don’t scale.” In his famous 2013 essay on this principle, Graham writes, “Startups take off because the founders make them take off.”
“I definitely had to do things that weren't going to scale over the long term,” Busque says.
In the early days, for example, Busque could often be found zipping around Boston on her little Honda scooter, completing tasks on her own. “I still am the master TaskRabbit,” she laughs.
That firsthand experience as a Tasker proved invaluable, as Busque got to know her customers and gained a deeper understanding of how her service fit into the marketplace. That willingness to dive in and get her hands dirty proved to be a hallmark strategy for the founder.
“Even as the company developed … I would say one strategy I used that worked pretty well was figuring out how to do things manually first, to really, really understand what to build, how to make it more efficient, and then start to automate layers on top of it over time.”
Take TaskRabbit’s application process, for example. The first version involved an online application, an in-person interview (to start the site, Busque conducted 30 interviews herself over coffee in Boston), and a background check. In total, that highly manual process took three to five days.
“But the time we spent,” Busque says, “for instance, doing in-person interviews, really helped us to understand what was important in finding the right Taskers, in the highest quality, most consistent Taskers. And so we then, from those in-person interviews, would figure out what questions we needed to ask, what the indicators were early that this Tasker was going to perform well on the platform.”
Now? Every piece of that process is automated, and a Tasker can be onboarded in a matter of hours, not days.
How to Get Comfortable With Competition
Every founder knows that sinking feeling of learning a new business similar to yours is entering the marketplace. Maybe it’s why entrepreneurs are notorious for guarding their ideas with intensity, fearing one slip-up will allow a competitor to crush everything they’ve built.
But the fact is, if you’ve got a good idea, someone else is either already doing it, or will be doing it soon.
After nearly a decade in business, TaskRabbit has seen its fair share of competitors. At first, this rattled Busque’s nerves. “I remember early on stressing out a lot about the competition, but I think what I learned over time was that I just needed to stay focused on what we were building.”
What inspired her shift from flustered to focused was seeing so many competitors rush in and then quickly fizzle out.
“I would see competitors come out of the gate, raise multi-millions of dollars, tens of millions of dollars, and burn through it in 18 to 24 months. And so after that happened a couple of times, I just realized that I was going to play a long game.”
What was TaskRabbit’s competitive edge? “From day one, we were producing revenue,” Busque says. “From day one, we had positive operating margins. So for every job that went through the site, we were always making money on it. And we had to be very disciplined about how to build a platform that operated that way.”
She also thinks that too many of her competitors caved to marketplace and investor pressures, something she as a startup founder was not immune to.
“I remember getting a lot of pressure even from my investors at one point in the company's life cycle about growth, about the competitive landscape, pressure to move faster, to copy whatever it was that they were doing, but I knew my business better than anyone.”
Repeat After Her: ‘This Is Not Rocket Science’
Many aspiring entrepreneurs let what they don’t know become a stumbling block to launching their businesses. But for Busque, what she didn’t know, she knew she could figure out. She recalls a conversation she had with herself just before leaving her job at IBM to pursue TaskRabbit:
“I was thinking about all the things that I didn't know how to do. I was thinking, ‘All I know how to do is build this product. I’m a coder; I know how to code. I don't know how to raise money from investors, I don't know how to hire, I don't know how to fire, I don't know how to build a financial model.’ And then I realized that, to me it sounds funny, but I remember saying to myself: ‘This is not rocket science. … Just go figure it out.’”
Busque cites confidence as a key requirement for every successful entrepreneur. “As an entrepreneur, you're doing something that no one's ever done before, and you're going to have to innovate and build new things in new ways.”
Another key entrepreneurial quality? Adaptability. And having gone from engineer to entrepreneur to investor, Busque clearly has that in spades. Though she studied at a women’s liberal arts college, she works in the mostly male tech industry. Though she’s highly analytical and majored in math and computer science, she appreciates the arts and minored in dance.
“The appreciation of those other aspects has really aided me in being able to adapt, and learn quickly, and jump into new situations, and have the confidence that I'm going to be able to figure out and learn whatever I need to as fast as I need to.”
From Founder to Investor
In 2016, Busque stepped down as CEO of TaskRabbit, and in September 2017, the company was sold to Ikea. (Interestingly, in a TEDx Talk six years prior to the acquisition, Busque said the most popular task posted on the platform was Ikea furniture assembly.)
“TaskRabbit is my first baby, my first child,” she says. “The one thing that you would hope for your child or for your company is that it has a full life, right? And is happy, and grows up, and moves on from you. And so I feel very fortunate that I got to be on that journey and see that happen all the way through.”
Even after the acquisition, Busque has her feet firmly planted in the startup world. She serves as executive chairwoman at TaskRabbit and has transitioned into the role of investor as general partner at Fuel Capital, a seed-stage venture fund in San Francisco. It’s a natural transition, given her background as the founder of a venture-funded startup.
“Building things has always been my passion,” she says. “I love the early stages of a company, when there is a seemingly impossible-yet-pressing problem to solve. I couldn’t be more excited to work closely with early-stage founders and their teams as they take on world-changing ideas—much like I did during my early days at TaskRabbit.”
Given her years of experience building a peer-to-peer marketplace, Busque as an investor has chosen to focus on consumer businesses and marketplaces.
“I’ve also focused my attention on meeting and supporting the ‘outsiders,’” she says, such as women founders, those who don’t fit the typical mold, and those who aren’t based in Silicon Valley. “It’s been awesome to meet so many awesome entrepreneurs who don’t look like the typical founder. … I certainly didn’t!”
Her new role and focus couldn’t come at a better time. According to the Crunchbase “Women in Venture” report, in 2017, only 6 percent of all seed dollars went to female-only-founded startups, while male-only-founded startups received 83 percent of all seed dollars. Those figures have remained remarkably static since 2012.
Busque’s first investments reflect the type of impact she hopes to make. Werk is a women-founded career platform helping women find flexible job opportunities. Feather is a Brooklyn-based startup that provides affordable furniture rental with quick delivery.
“As I thought about what I wanted to do next, I just started getting pulled in the direction of venture from a lot of different angles,” Busque says, “from investors that I highly respect, from friends that were in the industry, and so I made the decision that I wanted to do investing full time as the next stage of my career.”
And if the previous stage of her career is any indication, there’s no task too big for Busque.