As I continue my exploration of the wonderful world of the Gig Economy, I am discovering many fascinating firms.  My #CoolGigCompanies posts will profile what some of these firms are doing and the “special sauce” that they bring to the Gig Economy. Enjoy and please leave a comment if you want to add an observation or insight. 

Andrew Barr is sitting on the other side of the table now, and he likes the view.  After several years as a venture capitalist at Institutional Venture Partners (IVP), a firm focused on late stage private equity investments, Barr is now a co-founder at Prefer.com, recently funded by Benchmark Capital.

At IVP, Barr was exposed to the frenetic activity going on in the digital world.   He was involved in IVP’s investment in Care.com, a company he still admires.  The firm got many things right, he believes, in part because they were finding in most cases a long term caregiver for clients.  Due to the long term nature, they could afford to give appropriate attention to the vetting process and building relationships with both candidates and clients.

 

However, many digital talent platforms on the scene today are not like that.   Barr saw the commoditization of low skilled work through the advent of talent apps  as a force which dehumanized the process of securing services. This approach could be appropriate for delivery folks and drivers, but personal services, like massage therapists, personal trainers and  house sitters needed a different model.

As Co-founder, Scott Belsky, said in a recent CNN interview, they wanted to build “a big network of small world connections.” And with that idea, Prefer.com was launched.

Prefer.com, now available only in NYC, is a cross between Yelp, Handy and Next Door.  The idea is that most people have trusted professionals, from dog walkers to personal trainers to painters, that they would be more than happy to recommend to a friend. The Prefer app allows you to do just that.  If your friends opt in to the app, they can get your recommendations and you can get theirs. It is a much more private system than a digital platform, since you are only getting or receiving recommendations from trusted friends. “You find the people you need through people you already know”, says Barr.

This attribute cuts both ways.  A recent Fast Company article about Prefer cited the case of a masseuse who was getting referrals through a different source.  Some customers were expecting more than a massage, which was not her intention, so the masseuse had to limit her referrals to just the recommendations of existing clients.  Prefer allows her to do that in a more effective way.

It is because of this, that Barr believes the Prefer model is a structure that empowers independent service professionals. The Prefer model honors the entrepreneurial aspirations of the service professionals who use it, both in spirit and economically.   On platforms like Handy, workers are introduced to potential clients, but at a price; these apps take between 20 and 30 percent of the total fee paid for the service.  For some trades people, that seemed much too high.  It can be difficult to  build a career or a business on that, Barr points out.

Prefer charges only a referral fee if work is secured, and that fee is  less than 5% or about ten times less on average than the talent marketplaces. The intent with Prefer is to enable the professionals to build new relationships with the contacts of their existing clients.  In that way they can build a business and a livelihood, and that is a key value underlying the model.

The site launched in May with 600 active professionals and 1800 customers, according to Fast Company.  Even though the company has offices in both San Francisco and New York City, New York seemed the right place to launch.  San Francisco was deemed, in a way, too tech savvy to run a test program.  People in the Bay Area are used to having apps for everything, so the trial process may not have been representative of other jurisdictions.  Additionally, there is the sheer density of New York; it is the biggest market for demand and supply in the country, so if they can build the customer base and perfect it there, expansion is assured.

The competition, Barr notes, is not the various talents marketplaces like Angie’s List or Handy, since Prefer is not in the commodity matching business. Despite its inclusive nature, the Next Door program, where neighbors can recommend trades people is not a competitor either, since that  recommendations section is just an adjunct service, not a primary one.  Yelp too is not of concern, since most of these individual professional service providers do not have yelp profiles.  Additionally, yelp is all about aggregating ratings from a lot of anonymous users. Scores of people you don’t know are telling you someone is 4 stars or 5 stars, which may be meaningful for an algorithm.  Prefer is about an actual, personal recommendation from a friend.  The real competitor is “people like you and me, texting our friends when we need a recommendation.”

Well, if you live in New York, there is no need to do that anymore.  Just check out Prefer.com.

And please look for my new book, Thriving in the Gig Economy, for pre-sale on Amazon.com now. You can order it here.

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