For the past week and a half, we've been in the process of a pivot. We didn't want to reveal this publicly until we were certain it was the right path. Since then, we've received more traction on the new Pairi than we had pre-pivot and wanted to release some info.
Paris and I started Pairi because we believe there's a massive market of untapped potential in gig workers that will continue to grow as more jobs get automated away and workers demand more flexibility and control over their livelihoods. Our long term goal has always been to enable people to work for themselves who otherwise wouldn't be able to due to financial/logistical barriers to entry.
We spent the last 11 months building a marketplace to facilitate this.
There were a lot of things we had to learn through failure. As we continued to build our company, we would sometimes have the chance to interact with other marketplace founders. As these meetings happened we noticed a pattern -- other founders building their companies in different verticals were running into the same problems that we were. The way we addressed this was by building an internal Application Programming Interface (abbrev. API) to help us develop our marketplace more effectively.
Joining Techstars gave more evidence to support this hypothesis -- our batch of ten companies includes four marketplace companies at the time of writing. From talking to them every day, we've realized that many of the struggles we face, particularly regarding product development, are similar to theirs.
This realization prompted us to do some research. We interviewed a large number of marketplace founders and found that the average time spent building a prototype was ~600 hours, at an average cost just under $40 per hour. In many cases, this didn't even result in a usable product. After we conducted this research, we started looking into piloting B2B sales as an option to grow our business.
Within 3 days we had our first contract signed and money in the bank.
If I had to give a one-liner for what we're selling right now, I'd call it a marketplace API for startups that makes it 10x faster and cheaper to spin up a new platform with enterprise level security, consistency, and support. That 10x isn't just an arbitrary multiple--we've found that with our paid pilot customers, we've been able to reduce initial time investment by over 90% while guaranteeing a level of stability, security, and support previously unobtainable for our customers, which has allowed them to spend more time building their companies and improving their KPIs.
Our first B2B customer, Chef Austin of Elite Personal Chefs, is able to easily process $1.4 million + in revenue per year with his network of chefs. He's spent his entire professional career building his reputation, making connections, and improving his craft. He's an expert in food, but has zero knowledge on how to develop the technology to best scale his business beyond his personal limitations.
We've built a scalable, tech enabled way for Austin to expand his business beyond Chicago.
While this is a drastically different type of customer, it's a customer we're intimately familiar with -- ourselves. This is a product that we wished existed so much that we built and used it for almost a year. Moreover, starting and growing our consumer product offering made us subject matter experts on building marketplaces, and we don't think there's a better or more qualified team to build this than us.
Since we started exploring the B2B path, we've received more revenue from our first paid contract than we have from the entire lifetime of our B2C efforts thus far, with a significant amount of recurring revenue and an extremely short turnaround time. We've also found that the sales cycle for this type of customer is much more intuitive for us because we know exactly where in the customer lifecycle to target based on where we struggled in the past.
We've decided to indefinitely maintain and update the original B2C Pairi marketplace through the use of our new platform because 1) it's proof that you can build cool, useful stuff with our API 2) it makes peoples' lives better 3) it makes a non-trivial amount of money passively.
There's a $10 trillion dollar service economy ripe for disruption right now, with a majority of its transactions happening offline.
Our hypothesis is that service markets remain largely untapped because the people like Chef who have the necessary insights to build and scale companies in niche services industries have difficulty doing so because they have trouble building/purchasing the tools necessary to scale beyond just themselves.
There's a chance our hypotheses are wrong -- but if we're right, this is going to lead to incredible change around the way people make money online. We're excited to have you along for the ride.
Thanks for reading this. Please reach out to us if you have any questions.